* Says now sees 2014 revenues down, with steeper EBITA decline
* H1 net profit down more than half on impairment in Hungary
* Repeats that Hungarian ad tax is an 'alarming signal'
* Shares drop 8.5 percent to three-and-a-half-month low (Adds company comment, first-half net profit, share price)
FRANKFURT, Aug 21 RTL Group , Europe's largest broadcaster, cut its 2014 outlook on Thursday as a new advertising tax in Hungary and other problems hit its earnings in the first half of the year.
The Hungarian government has levied a tax on media companies that RTL parent Bertelsmann has said was a blatant attempt to force the group out of the country.
The tax rises to 40 percent on revenue above 20 billion forints ($84 million) per year, a level that only RTL's Hungarian offshoot generates in the country.
"As we already said in July, the precipitous introduction of the confiscatory advertising tax is an alarming signal for all international investors in Hungary," RTL said in a statement on Thursday, but added that it remained deeply rooted in the eastern European country.
An impairment charge on its Hungarian business was a factor in pushing down RTL's net profit by more than half to 202 million euros, far short of the 318 million average of analyst estimates in a Reuters poll.
RTL's German-listed shares dropped 8.5 percent to 73.65 euros in early trade, reaching their lowest level since early May. The German mid-cap index eased by 0.2 percent.
First-half group revenue and earnings before interest, tax and amortisation (EBITA) at RTL declined slightly more than expected. It also cited a difficult economic environment at its French TV and radio operations and continued pressure on volumes and prices at production company FremantleMedia.
RTL said it now expected 2014 group revenues to decline slightly this year, with a more significant decrease in EBITA, having previously seen both figures remaining broadly stable.
($1 = 0.7331 Euros)
($1 = 237.0600 Hungarian forint) (Reporting by Maria Sheahan; Editing by Victoria Bryan and John Stonestreet)